The affects of Lean and Agile adoption by manufacturers and distributors be enormous.   The transition from the traditional "Push Systems" (factories manufacture goods based upon forecast) to "Pull Systems" where products are produced upon order is, at the very least, a difficult task.  But the rewards are great!

A major tenet of Lean and Agile doctrine is the reduction of unnecessary inventories.   The total Supply Chain from raw materials transported to a manufacturer, shipping finished goods to a distributor, and shipping to the point of sale will change.  

Manufacturing Industry

Below are some of the many challenges manufacturing entities will face.  

• A manufacturer will need to develop a close relationship with each supplier and customer. 

• Communications, the sharing of intelligence, inventory status, and demand will need to take place both internally and externally. 

• Inventory management and location systems will need to be real time and more accurate.

• Scheduling short run production will be demanding.

• Shipping and receiving will need to be very efficient. 

• The size and profile of orders quite possibly from full pallet loads to cases and from case lot quantities to individual items.  

• Cross training production employees. 

• Shop floor data collection.

• Balancing cross departmental flow. 

• Changes in packaging may be necessary.

• Order packing operations may increase significantly. 

• Higher inbound and outbound transportation costs. 

• More sophisticated dock management.  

The rewards

• Smaller more efficient work cells requiring less costly machinery. 

• Discovering that a smaller manufacturing space is often less than before the transition to lean.

• Less internal materials transportation by fork trucks and conveyors may be necessary. 

• Less capital invested in inventory.

• Less capital invested in sophisticated machinery.   

• Fewer, but perhaps more skilled employees. 

• Less floor space. 

• Less disruption from market downturns. 

• Less offshore competition 

Distribution Industry

Below are some of the many challenges the distribution industries will face.  

• The distributor will need to develop a close relationship with each supplier and customer. 

• Communications, the sharing of intelligence, inventory status, and demand will need to take place both internally and externally, EDI for example. 

• Inventory management and location systems will need to be real time and most accurate.

• Fluctuations in daily activity will be demanding.

• Shipping and receiving will need to be extremely  efficient. 

• The size and profile of orders from full pallet loads to cases and from case lot quantities to individual items.   More smaller orders for smaller quantities.  

• Cross training production employees. 

• Order status data collection.

• Balancing pick, pack and ship area flows. 

• Changes in packaging may be necessary.

• Order packing operations may increase significantly. 

• Higher inbound and outbound transportation costs. 

• More sophisticated dock management.  

The rewards

• Discovering that a smaller warehousing space is often less than before the transition to lean.

• Less internal materials transportation by fork trucks although conveyors may be increase. 

• Less capital invested in inventory, more turns per year.

• Less capital invested in space.   

• Fewer, but perhaps more skilled employees. 

• Less disruption from market downturns. 

• Would anticipate a demand for more 3PL operations.   

Transportation Industry

Below are some of the many challenges the transportation logistics providers will face.  

• The transportation provider will need to develop a close relationship with each customer. 

• Communications, the sharing of intelligence, delivery status will need to take place both internally and externally. 

• Fleet management and tracking systems will need to be real time and most accurate.

• Fluctuations in daily activity will be demanding.

• The size and profile of orders from full pallet loads to cases and from case lot quantities to individual items.  

• More smaller orders and smaller quantities may require a more diverse fleet configuration, more smaller orders more frequency.  

• More paperwork. 

• Shipment status data collection.

• Flexible pick up and delivery routes.

• More scheduled delivery requirements. 

• Higher inbound and outbound handling costs. 

• More sophisticated dock scheduling management.  

The rewards

Because transportation logistics is almost a commodity in nature, it is difficult to pin point real rewards or financial gains that Lean and Agile manufacturing and distribution may offer in the transportation logistics providers. 

It would be more accurate to say that the changes in activity will redefine and shape the industry.  We would anticipate there be opportunities for entrepreneurial advances in the transportation logistics industry both for local and nation providers. 

For more information on learning more about Lean and Agile manufacturing and Lean and Agile Distribution please visit our sister site at LeanAndAgile-mhc.com to find out more. 

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